GBP/USD reflects optimism for a Brexit deal

GBP/USD is trading closer to 1.33 on hopes of a fisheries-related Brexit breakthrough. Apart from incessant Brexit headlines, the cable is swaying in response to coronavirus related developments. Overall, sterling has room to rise, according to FXStreet’s Analyst Yohay Elam.

Key quotes

“France may be forgoing some of its demands on fisheries – opening the door for a Brexit deal next week, at least according to the UK's Telegraph. The EU and the UK continue intense talks about future relations in Brussels, and these upbeat headlines are pushing the pound higher. While both sides are likely to miss their goal of shaking hands before Thursday's virtual EU Summit, investors eye a deal early next week. 

“Cases and deaths continue rising on both sides of the Atlantic, with Britain not ruling out extending the nationwide lockdown, which expires on December 2. In the US, hospitalizations hit yet another new record above 78,000 and several reluctant governors have imposed restrictions. Cases in the UK have resumed their rises, yet remain below those in America.” 

“Investors are clinging to vaccine hopes. Pfizer and BioNTech announced that their inoculation has passed a key safety milestone, en route to receiving authorization. Earlier this week, Moderna joined Pfizer in announcing promising results for its immunization candidate.” 

“Pound/dollar has been extending its uptrend, benefiting from upside momentum on the 4-hour chart and continuing to set higher highs. The Relative Strength Index is still below 70, thus outside overbought conditions.” 

“GBP/USD has surpassed 1.3280, a peak recorded last week. Further above, critical resistance awaits at 1.3310, the November high. The next lines to watch are 1.3360 and 1.3420. Support awaits at 1.3240, which has been a separator of ranges in recent days. It is followed by 1.3290 and 1.3150.”